Requires the secretary of the executive office of health and human services to monitor and mandate changes to the price-setting practices of pharmacy benefit managers to prohibit the spread pricing payment model.

Plain-English Summary

This bill targets a pricing practice used by pharmacy benefit managers (PBMs) — the middlemen companies that manage prescription drug benefits for insurance plans, employers, and government health programs. Specifically, it would ban a practice called "spread pricing," where a PBM charges an insurance plan or employer more for a drug than it actually pays the pharmacy, and keeps the difference (the "spread") as profit — often without the payer knowing exactly how much is being kept.

Under this bill, Rhode Island's Secretary of the Executive Office of Health and Human Services would be required to monitor how PBMs set their prices and have the authority to require PBMs to change their practices if they are found to be using the spread pricing model. The goal is to replace spread pricing with a more transparent approach, often called "pass-through pricing," where PBMs are paid a flat, disclosed fee rather than profiting from undisclosed markups on drug transactions.

This bill would affect insurance plans, employers, and government health programs that hire PBMs to manage drug benefits, as well as the pharmacies that are paid through those arrangements. Ultimately, it could impact Rhode Island residents who rely on prescription drug coverage, since eliminating hidden markups has the potential to lower drug costs for health plans — and potentially for consumers and taxpayers who fund programs like Medicaid.